Wednesday's Worst Stocks in the World

Bad days. We all have them; some of us deserve them.

Here are five stocks whose naughty ways drew investors' scorn on Wednesday.

Company

Closing Price

CAPS Rating (5 Max)

% Change

52-Week Range

GPC Biotech (NASDAQ:GPCB)

$4.79

*

(58.13%)

$4.25 - $37.79

Monaco Coach (NYSE:MNC)

$11.60

*

(22.10%)

$11.30 - $17.95

Carrier Access (NASDAQ:CACS)

$2.89

*

(17.43%)

$2.78 - $6.80

LandAmerica Financial (NYSE:LFG)

$27.79

*

(13.56%)

$27.46 - $108.92

Spartech (NYSE:SEH)

$15.37

*

(9.69%)

$14.41 - $30.71

Sources: The Wall Street Journal, Yahoo! Finance, Motley Fool CAPS.

Naughty?
Well, OK, we can't exactly call these stocks naughty. But none of them gets much love from our 72,000-person-strong Motley Fool CAPS community of amateur and professional stock pickers.

To the contrary -- when it comes to these stocks, CAPS investors have gone thumbs-down more often than Roger Ebert. They don't believe any of these stocks are worth owning. They even think that some may be worth shorting.

Which of today's candidates is worst? Read on, dear Fool.

Worse
We begin with Spartech. The maker of alloy and plastic molded products has once again lowered guidance. The last time was just back in September. Executives now expect Spartech to break even in the fourth quarter.

Yet it could be a while before any sort of turnaround takes hold. Quoting from the press release: "The revised quarterly guidance is driven by a weak sales environment coupled with challenging resin prices and other specific items impacting the quarter. The relative strength in many of the international economies, the weakening of the U.S. dollar, and rising crude oil prices have put additional pressure on our margins." [Emphasis added.]

So business will improve when oil prices fall and the dollar recovers? OK, then. Good luck with that.

Worser
Next up is RV specialist Monaco Coach, which makes our list because, while peers such as Thor Industries (NYSE: THO  ) are accelerating, Monaco has hit the brakes.

Take fourth-quarter guidance, for example. Monaco yesterday said it would book between $0.02 and $0.04 a share on $290 million to $300 million in fourth-quarter revenue, far less than what the Street had expected.

Executives didn't comment on that in the earnings release, which leaves me to ask: If all of the same favorable demographics -- baby boomers retiring, an overall aging of the population, outrageously crowded airplanes -- favor Monaco and its peers, why is Monaco flailing and Thor flying?

The answer, it seems, is management:

Return on Capital

TTM*

2006

2005

2004

Monaco Coach

1.9%

2.3%

3.5%

13.2%

Thor Industries

15.7%

24.0%

20.6%

21.5%

Source: Capital IQ, a division of Standard & Poor's.
*Trailing 12 months.

The lesson? Watch how executives deploy available capital, Fool.

Worst
But our winner is GPC Biotech, which on Wednesday announced that its prostate-cancer remedy, Orplanta -- also known by its generic name, satraplatin -- didn't show a survival benefit in a key phase 3 trial.

That may not be surprising to some onlookers. According to reporting at TheStreet.com, the Oncology Drugs Advisory Committee in July requested that the FDA wait to approve Orplanta. It also questioned the methods behind research GPC had thus far submitted.

But, as bad as that is, it's not why GPC tops today's list of losers. My problem is with management's handling of shareholder capital. Orplanta was the one late-stage drug in GPC's pipeline, yet the company more than doubled its spending over the trailing 12 months -- from $34 million to more than $72 million.

To be fair, GPC has $91.5 million in the bank and $3.1 million in debt as of this writing. Yet that's not likely to be enough for GPC to fund years of new drug development. So, instead, they'll dilute shareholders in the pursuit of needed capital from fresh sources. (Sigh.)

If only someone had been responsible enough to cut back on spending after the FDA asked to see survivability data for Orplanta. GPC and its we'll-worry-about-cash-flow-later management team ... Wednesday's worst stock in the CAPS world.

Do you agree? Disagree? Let us know what you think by signing up for CAPS today. It's 100% free to participate.

See you back here tomorrow for more stock horror stories.


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